French hard-left presidential candidates eye cooperation, bond yields rise

Fri Feb 17, 2017 5:18pm GMT

By Elizabeth Pineau and John Geddie

PARIS/LONDON (Reuters) - Two hard-left candidates said on Friday they were discussing cooperation in their bid for the French presidency, jolting investors already nervous over the possibility of a win for far-right, anti-globalisation candidate Marine Le Pen.

Socialist party officials and pollsters said cooperation between Benoit Hamon and Jean-Luc Melenchon was very unlikely, due partly to their policy differences, but French bond yields rose amid uncertainty over its possible impact on the election.

Investors believe a tie-up could either backfire and catapult Le Pen into the Elysee palace or succeed and land France with a far-left president pursuing deficit-boosting economic policies.

A Cevipof poll published on Thursday gave Hamon, who won a primary last month to become the Socialist party's candidate, 14-14.5 percent in the first round of the election on April 23. Melenchon, who has Communist backing, had 11.5-12 percent.

They are well behind frontrunners Le Pen, centrist Emmanuel Macron and Francois Fillon of the centre-right, but a combined vote could allow one of the leftists to survive the first round and possibly face Le Pen in the decisive May 7 second round.

Pollsters have not predicted what might be the outcome of such a scenario, but investors were taking a view on Friday.

"That would be the worst possible outcome as far as investors are concerned," said KBC strategist Piet Lammens.

"All of us thought the first round would go to Le Pen and the second would go against her, but now that is doubtful. Also, Hamon is not left wing a la (Socialist President) Francois Hollande, he is much further left – he has talked about universal income, working less, earlier pensions – so whether he wins or Le Pen wins France would go backwards."   Continued...

French Socialist party 2017 presidential candidate Benoit Hamon attends a news conference to present his campaign team for the forthcoming Presidential elections in Paris, France, February 11, 2017.  REUTERS/Philippe Wojazer
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